The European Union Slapped an Embargo on Iranian Oil Supplies

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TV/Radio Broadcast Voice of Russia's Inside View
Summary
The European Union’s embargo on Iranian oil supplies is unlikely to be effective in forcing Iran to restart negotiations on its on-going nuclear program.
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During a meeting in Brussels on Monday, the 27 EU foreign ministers slapped an embargo on Iranian oil supplies and also agreed to freeze the assets of the Iranian Central Bank. The sanctions are expected to come into force this week. And commenting on this today will be our guest Pyotr Topychkanov, Nonproliferation Program coordinator at the Carnegie Moscow Center.

The European Union slapped an embargo on Iranian oil supplies on Monday. Speaking before the meeting EU Foreign Policy Chief Catherine Ashton said the sanctions were intended to “make sure that Iran takes seriously the request to come to the table and meet.” How do you think, if this embargo can make Iran start negotiations?

First of all the reaction from Iranian side was negative and Iranian side declared the sanctions ineffective and not productive and it means that Iran is not ready to react and to agree to negotiate its nuclear program after the sanctions. But these sanctions from European Union countries also include sanctions against the Central Bank of Iran and a number of other measures against Iranian assets in European countries. So, maybe Iran will feel the real results of these sanctions after a couple of months and after that the political position of this country will be ready to change.

Sergey Lavrov said that sanctions on Iranian oil exports would “hurt” ordinary people and were more about stirring up unrest than preventing the spread of nuclear weapons.

I would agree with this position because unfortunately the example of North Korea has demonstrated that even very strong sanctions against a country cannot stop the development of nuclear program even in the case when people feel shortages in food, in oil and gas, in everyday goods and so on. So, I would agree with this position. But of course it’s not easy to compare these two countries, I mean Iran and North Korea, because Iran has a much more complicated society and the number of dissidents and opposition leaders in Iran and outside and of course they will try to understand feelings among people in Iran and sometimes maybe to use these feelings. But nevertheless the nuclear program with this leadership will continue.

The sanction stipulates an immediate ban on all new oil contracts with Iran, while existing contracts will be on it until the 1st of July. As we know Greece, Italy and Spain consume a total of 68% of the Iranian oil imported to Europe with Greece being the largest consumer accounting for 35% of the imports. So, how will the sanctions influence on these countries?

It seems to me that European countries decided to agree on these sanctions after the preliminary assessment of its result and possible results for European countries. And I believe that the principal consumers of Iranian oil, I mean Italy, will get additional supplies from other countries including Russia as a carrot in exchange for their agreement to sign the sanctions against Iran. So, I believe that for the European countries it will not be a problem, especially for these weak economies of the European south.

And what about Russia? What effects will this have on Russia?

Politically Russia is against these sanctions but economically Russia will benefit from these sanctions because oil prices will grow and additional oil supplies will come from a number of countries including Russia. Of course Russia cannot be a substitute of Iran in oil supply but we will be able to add some barrels for European countries.

Tehran has threatened to block the Strait of Hormuz – a strategic waterway, where an estimated 40% of the world’s seaborne oil passes in response to Western plans to ban Iranian oil imports and many analysts believe that Iranian attempts to block oil traffic through the Strait of Hormuz will prove ineffective because fuel and energy can be transported via oil pipelines in Saudi Arabia and in the United Arab Emirates. Do you share this point of view?

It’s not easy to change routs of oil supplies from sea transfers to using pipelines and if Iran blocks the Strait of Hormuz it will take time to change the ways of transportation of oil. So, I think that of course this action from Iranian side will damage port economy and a number of countries will suffer from this action including China, including India because these countries are the main consumers of oil which is being transported through the Strait of Hormuz. So, frankly, I’m not sure that Iran is ready to lose the support of these countries, mainly China.

US President Barak Obama said the United States would continue to impose sanctions against Iran over its controversial nuclear program. So, will these sanctions be effective and what end can they come to?

Sanctions as a long term policy toward nuclear program of Iran cannot be effective enough to stop its nuclear program. Unfortunately we could see this during last years that the United States, European countries and Security Council can impose a number of sanctions against banks, against companies from Iranian side, against even oil and gas producers from Iranian side but nevertheless the nuclear program of Iran is still here.

So, the sanctions against any country can work if this is the last mean before the military action. Now Iran can survive these sanctions as well as it has survived the previous sanctions. And for me maybe a more effective way is to change US approach to the Iranian problem of nuclear energy, maybe to find some collective decision using nuclear facilities in Russia and Russia has offered to use international enrichment facility in Angarsk. Of course Iran is waiting for security guarantees from the West and NATO and first of all from the United States.

End of document
Source http://carnegie.ru/2012/01/24/european-union-slapped-embargo-on-iranian-oil-supplies/aiwv

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